March 22, 2024

VIA SEDAR+

To:    British Columbia Securities Commission

    Alberta Securities Commission

    Financial and Consumer Affairs Authority of Saskatchewan, Securities Division

    The Manitoba Securities Commission

    Ontario Securities Commission

    Autorité des marchés financiers

    Financial and Consumer Services Commission (New Brunswick)

    Nova Scotia Securities Commission

    Financial and Consumer Services Commission (Prince Edward Island)

    Office of the Superintendent of Securities Service Newfoundland and Labrador

    Office of the Superintendent of Securities for the Northwest Territories

    Office of the Yukon Superintendent of Securities

    Office of the Superintendent of Securities Nunavut

Dear Sirs/Mesdames:

Pan American Silver Corp. (the “Company”) has filed an amended version of the technical report for the La Colorada property entitled “Amended NI 43-101 Technical Report for the La Colorada Property, Zacatecas, Mexico” with an effective date of December 18, 2023 (the “Technical Report”).

The amended version of the Technical Report is being filed to correct certain typographical and clerical errors included in Table 1-1: “Mineral resource statement for the combined La Colorada Vein Mine and Skarn Project” and Table 14-1: “Mineral resource statement for the combined La Colorada Vein Mine and Skarn Project” in the Technical Report, where the mineral resource estimates for lead (Pb) and zinc (Zn) at the La Colorada Vein Mine and the totals for the property were inadvertently misstated. The mineral resource estimates for lead (Pb) and zinc (Zn) at the Skarn Project were correctly stated in these tables.

Additionally, the Company’s address and the date of the report have been updated for currency, and Figure 24-3: “Plan view of Skarn Project LOM development” has been updated for legibility.

The SEDAR+ filing number for the Technical Report is 06080562.

Yours truly,

Pan American Silver Corp.

By: “Delaney Fisher”

Delaney Fisher
Senior Vice President, Associate General Counsel and Corporate Secretary

This Technical Report (as defined herein) contains or incorporates by reference “forward-looking statements” and “forward-looking information” under applicable Canadian securities legislation and within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking information includes, but is not limited to: cash flow forecasts; projected capital; operating and exploration expenditures; targeted cost reductions; mine life and production rates; mineral grades; infrastructure, capital, operating and sustaining costs; the future price of gold, silver, zinc and lead; potential mineralization and metal or mineral recoveries; estimates of mineral resources and mineral reserves and the realization of such mineral resources and mineral reserves; the ability to replace mineral reserves; information pertaining to potential improvements to financial and operating performance and mine life at the La Colorada Property (as defined herein) that may result from expansion projects or other initiatives, including but not limited to the Skarn Project (as defined herein); the timing and expected outcomes of optimization projects; maintenance and renewal of permits or mineral tenure; estimates of mine closure obligations; leverage ratios; and information with respect to Pan American’s (as defined herein) strategy, plans or future financial, or operating performance. Forward-looking statements are characterized by words such as “plan,” “expect”, “budget”, “target”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur, including the negative connotations of such terms. Forward-looking statements are statements that are not historical facts and are based on the opinions, assumptions and estimates of Qualified Persons (as defined herein), considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, but are not limited to: the impact of general domestic and foreign business, economic and political conditions, including but not limited to the impact of the 2023 Decree (as defined herein); legal proceedings brought against the La Colorada Property or Pan American, including but not limited to the legal proceeding brought before the SEDATU (as defined herein); global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions; fluctuating metal and commodity prices (such as gold, silver, zinc, lead, diesel fuel, natural gas and electricity); currency exchange rates (such as the Mexican peso and the Canadian dollar versus the United States dollar); changes in interest rates; possible variations in ore grade or recovery rates; the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation and exploration successes; diminishing quantities or grades of mineral reserves; increased costs, delays, suspensions, and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including disruptions in the maintenance or provision of required infrastructure and information technology systems; damage to Pan American’s or the La Colorada Property’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the handling of environmental matters or dealings with community groups, whether true or not; risk of loss due to acts of war, terrorism, sabotage, crime and civil disturbances; risks associated with infectious diseases, including COVID-19; risks associated with nature and climatic conditions; uncertainty regarding whether the La Colorada Property will meet Pan American’s capital allocation objectives; the impact of inflation; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property in Mexico, including but not limited to the 2023 Decree; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; changes in project parameters as plans continue to be refined; changes in project development, construction, production and commissioning time frames; contests over title to properties or over access to water, power, and other required infrastructure; increased costs and physical risks including extreme weather events and resource shortages related to climate change; availability and increased costs associated with mining inputs and labor; the possibility of project cost overruns or unanticipated costs and expenses, potential impairment charges, higher prices for fuel, steel, power, labour, and other consumables

contributing to higher costs; unexpected changes in mine life; final pricing for concentrate sales; unanticipated results of future studies; seasonality and unanticipated weather changes; costs and timing of the development of new deposits; success of exploration activities; risks related to relying on local advisors and consultants in foreign jurisdictions; unanticipated reclamation expenses; limitations on insurance coverage; timing and possible outcome of pending and outstanding litigation and labour disputes, including but not limited to the proceeding brought before the SEDATU; risks related to enforcing legal rights in foreign jurisdictions, vulnerability of information systems and risks related to global financial conditions. In addition, there are risks and hazards associated with the business of mineral exploration, development, and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding, failure of plant, equipment, or processes to operate as anticipated (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks), as well as those risk factors discussed or referred to herein and in Pan American’s Annual Information Form filed with the securities regulatory authorities in all of the provinces and territories of Canada and available under Pan American’s profile at www.sedarplus.ca, and Pan American’s Annual Report on Form 40-F filed with the United States Securities and Exchange Commission. Although Pan American has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Pan American undertakes no obligation to update forward-looking statements if circumstances or management’s estimates, assumptions, or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding Pan American’s expected financial and operational performance and results as at and for the periods ended on the dates presented in Pan American’s plans and objectives and may not be appropriate for other purposes.

This technical report has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ in certain material respects from the disclosure requirements promulgated by the Securities and Exchange Commission (SEC). For example, the terms “Mineral Reserve”, “Proven Mineral Reserve”, “Probable Mineral Reserve”, “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are Canadian mining terms as defined in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves, May 2014 (the CIM Definition Standards), adopted by the CIM Council, as amended. These definitions differ from the definitions in the disclosure requirements promulgated by the SEC. Accordingly, information contained in this technical report may not be comparable to similar information made public by U.S. companies reporting pursuant to SEC disclosure requirements.

Units of measurement used in this technical report conform to the metric system. All currency in this report is listed in US dollars (US$) unless noted otherwise.

1Summary

Pan American Silver Corp. (Pan American) holds a 100% interest in the 56 mining concessions (totaling approximately 8,840 hectares) that comprise the La Colorada property (the La Colorada Property) located in Zacatecas, Mexico, through its subsidiary, Plata Panamericana S.A. de C.V. (Plata). A collection of three underground silver-lead-zinc mines named Candelaria, Estrella, and Recompensa (collectively, the La Colorada Vein Mine) are located within the La Colorada Property. Currently, underground mining at the La Colorada Vein Mine is conducted at the Candelaria and Estrella mines, whereas no mining is currently taking place at the Recompensa mine. The La Colorada Property also hosts the large polymetallic skarn exploration project (the Skarn Project) discovered in 2018 through brownfield exploration near the La Colorada Vein Mine.

With nearly 30 years of experience in the Americas, Pan American is a Canadian-based leader in producing precious metals in the region. Pan American operates mines that produce silver and gold in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. In addition, Pan American owns the Escobal Mine in Guatemala, which is not currently in operation. Pan American has earned a reputation for excellence in sustainability performance, operational efficiency, and financial prudence.

This technical report was prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). It presents the mineral resource and mineral reserve estimates for the La Colorada Vein Mine as of June 30, 2023, describes the current mining operation, and summarizes the LOM plan and cost estimates. The technical report also describes the results of the preliminary economic assessment (PEA) of the Skarn Project, disclosed on December 18, 2023, and includes an updated mineral resource estimate for the Skarn Project. The PEA considers a 50,000 tpd sublevel cave mining method and a conventional 50,000 tpd capacity selective zinc and lead flotation processing plant and filtered tailings storage facility. Annual production is estimated to average 17.2 Moz of silver, 427 kt of zinc and 218 kt of lead during the first 10 years of an estimated 17-year mine life.

1.1Property Description and Ownership

The North American Cordillera hosts the La Colorada Property, which lies within the Sierra Madre Occidental mountains. The area’s landscape consists of broad flat valleys and narrow, relatively low mountain ranges and hills with altitudes between 2,100 and 2,550 metres above sea level. The area has a dry to semi-dry climate.

The La Colorada Vein Mine has three underground mines that extract oxide and sulphide ores: Candelaria, Estrella, and Recompensa (no mining is currently taking place at the Recompensa mine). Near the mine, brownfield exploration in 2018 discovered the large polymetallic Skarn Project. The La Colorada Property consists of 56 mining concessions covering about 8,840 hectares, including some exploration concessions outside the mining area. The mining concessions controlled by Pan American contain the mineral reserves, mineral resources, all known mineralized zones, mine workings, processing plant, effluent management and treatment systems, and tailings disposal areas.

The La Colorada Vein Mine workings are covered by about 1,300 ha of surface rights that Pan American owns or has access to. Pan American is buying 2,000 ha of private land and planning to rent another 2,800 ha of ejido land to secure surface rights for the Skarn Project.

The surface infrastructure includes the plant processing facilities, tailings and waste rock storage facilities, offices and workshops, accommodation camps, change houses, warehouses, fuel and lubricant facilities, water and diesel tanks, surface electrical distribution, air compressors, explosive magazine, water treatment plants, sludge settling

ponds and piping, surface ventilation fans, mine portals, run-of-mine ore stockpiles, domestic waste landfill, roads, surface grading and drainage, security gates and fencing, and satellite communication equipment.

The La Colorada Property has a long history of mining since 1925. Several mining operations have exploited the area until 1997, when Pan American acquired an option agreement with Minas La Colorada S.A. de C.V. (MLC). The production data before Pan American’s involvement are unknown. Pan American began small-scale production in January 2001 from surface stockpiles and underground development headings. Full-scale production commenced in mid-2003. From 2001 to 2023, Pan American has produced more than 98 Moz of silver, 149 kt of zinc, and 78 kt of lead.

There are no known significant environmental liabilities on or related to the La Colorada Property. There are no known environmental issues that could materially impact Pan American’s activities on the La Colorada Property. To the best of Pan American and the qualified person’s knowledge, all permits and licences required to conduct activities on the La Colorada Property have been obtained and are currently in good standing.

1.2Geology and Mineralization

The La Colorada Property is located in the Zacatecas mining district, within the Mexican Silver Belt. Many of the major deposits in the silver belt are located within the Sierra Madre Occidental mountains and associated volcanic belt. The region contains epithermal Ag-Pb-Zn ± Au ± Cu vein, and polymetallic skarn, carbon replacement deposits (CRD), and porphyry deposits. Epithermal intermediate-sulphidation Ag-Pb-Zn vein, CRD, and polymetallic skarn mineralization has been identified at the La Colorada Property. The upper portions of the epithermal vein system have been the historical focus of the currently operating La Colorada Vein Mine, while the skarn and CRD mineralization is currently being defined and characterized by ongoing drilling and technical studies at the Skarn Project.

At the La Colorada Vein Mine there are three ENE to E–W-trending principal vein structures which, from NW to SE, are named Recompensa, Amolillo and NC-HW. Each vein has second-order sub-parallel splays and duplexes; there are also several NW- to WNW-trending veins. In general, the principal veins are strongly brecciated, locally oxidized, and often exhibit irregular vein boundaries. Most of the mineralization of economic significance is hosted in quartz veins that average 1 to 2 m wide but that can be significantly wider. The vein fillings consist of quartz, calcite, and locally barite and rhodochrosite. Galena, sphalerite, pyrite, native silver, and silver sulphosalts are present in unoxidized veins. The major mineralized veins are strongly brecciated and locally oxidized. Veta 3 runs parallel to the HW and NC series, strikes for over 900 m towards the northeast, dips 75° to the northwest, and extends for about 400 m down dip. The average vein width is 1.7 m.

At the Skarn Project, faults acted as a conduit for the intrusion of several porphyries and their associated hydrothermal fluids. To date, two intrusive centres with similar characteristics have been identified: the main intrusive centre located between zones 901 and 903 of the Skarn Project; and a second centre north of the Skarn Project’s 902 zone. Emplacement of the intrusions fractured the sedimentary rocks, increasing the porosity and permeability of the limestone host rocks which were metamorphosed where in contact with the hot fluids. The evolution of the skarn system begins with contact metamorphism that in its early phase gives rise to the occurrence of marble, calc-silicate hornfels and recrystallized limestone. The final stage of skarn development is a distal phase consisting of CRD replacement bodies and veinlets of carbonate with sulphides.

1.3Exploration Status

Before Pan American acquired the La Colorada Property, it had been exploited for many years without any systematic exploration work. The main structures were identified by underground mining before Pan American’s involvement. Pan American started to systematically test the zones that contain silver, gold, lead, and zinc in 1997 and has continued to drill since then to increase the mineral resource and compensate for the depletion of mineral reserves. MLC, the previous owner, drilled 131 core drill holes for a total of 8,665 m. As of June 2023, more than 757,000 m were drilled at the La Colorada Property in both the La Colorada Vein Mine areas (Recompensa, Estrella, and Candelaria) and the Skarn Project. This includes 342 drill holes (for 282,555 m) that target the Skarn Project, of which 181 drill holes (126,697 m) were directional drilling from existing drill holes to reach the target depths.

1.4Mineral Resource and Mineral Reserve Estimates

Mineral resource estimates were carried out separately for the La Colorada Vein Mine and the Skarn Project. The La Colorada Vein Mine mineral resource consists of 64 mineralized zones, each estimated separately. Annual updates are carried out on those mineralized zones that have have been mined or drilled significantly since their previous estimate. The Skarn Project is updated when significant additional drilling information becomes available and is herein the focus of a PEA.

The combined mineral resource for the La Colorada Vein Mine and the Skarn Project is tabulated below in Table 1-1. The effective date of the mineral resource is June 30, 2023, for the La Colorada Vein Mine and December 18, 2023, for the Skarn Project. Mineral resources exclude those mineral resources that were converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves.

1.Numbers may not add up due to rounding.

2.Mineral resources exclude those mineral resources that were converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

3.Mineral resources were estimated in accordance with the guidelines laid out in the CIM Mineral Resource and Mineral Reserves Estimation Best Practice Guidelines (November 2019) and classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines.

4.For the La Colorada Vein Mine, the vein, hanging wall and footwall zones were combined into a practical mining width that includes a minimum dilution of 40 cm, or 35 cm of each hanging wall and footwall for cut and fill or long-hole stoping mining methods respectively. A minimum mining width of 2.6 m was used for cut and fill and 2.2 m for long-hole mining areas.

5.For the La Colorada Vein Mine, the diluted mining interval was reported above an economic cut-off grade that was calculated using a price of US$19 per ounce of silver US$1,300 per ounce of gold, US$2,600 per tonne of zinc, and US$2,000 per tonne of lead. Economic cut-off grades used for reporting the resource vary for each vein as a function of oxidation, depth, mining method, and geotechnical and processing variables.

6.The La Colorada Vein Mine’s listed lead and zinc grades are averages for the deposit. However, the only payable base metals are those from concentrates produced from the sulphide ores, not those from the doré produced from the oxide ores.

7.The effective date for the mineral resource estimate for the La Colorada Vein Mine is June 30, 2023.

8.Prices used to report the Skarn Project mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc, and US$2,200 per tonne of lead.

9.For the Skarn Project mineral resource, an estimated NSR (in US$/t) was calculated using metallurgical recoveries, obtained from metallurgical testing, of 87.4% silver, 88% lead and 93% zinc with mineral concentrates containing 67% Pb in the lead concentrate and 60% Zn in the zinc concentrate. Estimates for transport, payability, and refining/selling costs, based on experience and long-term views of the marketing, treatment, and refining of these types of mineral concentrates, were included.

10.Reasonable prospects for eventual economic extraction were assessed for the Skarn Project by determining the total in-situ tonnes and metal grades constrained inside volumes that were based on a SLC mining method. To determine the constraining SLC shapes, an initial elevated cut-off value of $50/t NSR was applied. Geotechnical, geometry and caving rules were then applied to ensure that practical mining shapes and sequences were achieved. Each level, each zone was individually tested for overall economics, and then tested as part of the caving sequence. The resulting constraining shapes were then considered as practical mining outlines. The tonnes and grades are inclusive of the must-take low-grade material within the volume. No other mining recovery, ring recovery, dilution, or mineral losses have been applied. Additional material outside the SLC shapes but within the development volumes that is above a cut-off grade of $10/t NSR was included in the resource.

11.The effective date of the Skarn Project mineral resources estimate is December 18, 2023. The geological model was completed in December 2022 and results from diamond drilling conducted in 2023 are therefore not included in this estimate.

12.The mineral resource estimates for the La Colorada Vein Mine and Skarn Project were prepared under the supervision, or reviewed by Christopher Emerson, FAusIMM, who is a qualified person as that term is defined in NI 43-101.

Pan American updates mineral reserve estimates on an annual basis following reviews of metal price trends, operational performance and incurred costs for the previous year, the results of diamond drilling and underground channel sampling conducted during the year, and production and cost forecasts over the LOM. The mineral reserve statement of the La Colorada Vein Mine as of June 30, 2023, is presented in Table 1-2.

1.Mineral reserves have been estimated by the La Colorada technical services team under the supervision of Martin Wafforn, Senior Vice President, Technical Services and Optimization at Pan American Silver Corp., and a qualified person as defined by National Instrument 43-101. The mineral reserve estimate conforms to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines.

2.Mineral reserves are reported by zone at variable cut-off values ranging from US$97.65/t to US$166.71/t. Metal price assumptions of US$19/oz for silver, US$1,300/oz for gold, US$2,000/t for lead and US$2,600/t for zinc were used in the estimation. Processing recovery assumptions for oxides are of 82.03% for silver and 45.68% for gold. Processing recovery assumptions for sulphides are of 93.10% for silver, 55.11% for gold, 84.62% for lead and 84.46% for zinc. Mine operating cost assumptions vary by zone and range from US$56.15/t to US$102.50/t, depending on the mining method, hauling distances, and lateral development requirements. Processing cost assumptions, including tailings disposal costs, are of US$14.58/t for sulphides and US$43.36/t for oxides, while G&A cost assumption are of US$20.85/t.

3.Mineral reserves are stated at a mill feed reference point and account for minimum mining widths, diluting material, and mining losses.

4.All selective mining units converted to mineral reserves contain a majority proportion of measured and indicated mineral resources.

5.Numbers may not add up due to rounding.

1.5Mining and Processing Methods

The Candelaria and Estrella mines are the only active underground operations at the La Colorada Property (the Recompensa mine is currently not in operation). The mining methods vary depending on the local geology and vein inclination. They can be either cut-and-fill (breasting) or sublevel long-hole stoping (SLS). The main access ramps and haulage drifts have a dimension of 3.5 m by 3.5 m and a maximum slope of 15%. Below level 408, they are enlarged to 4.0 m by 4.5 m to allow for bigger equipment and more mechanization at deeper levels. Electric hydraulic jumbo drills and hand-held drills are both used for the development mining to access the ore. Scooptrams are used for tramming ore and backfill to and from stopes, and haul trucks are used for underground haulage. Development waste is hauled to stopes to be utilized as backfill, and ore is hauled to ore passes or to one of the rock-breaker grizzlies at the shaft. Ore is hoisted to surface using a shaft with a capacity in excess of 2,300 tpd and is hauled to the mill crusher stockpile. When required, ore can also be hauled to the surface using the two access ramps present in each mine.

The processing plant has two different circuits for processing sulphide and oxide ores. The sulphide ore goes through a conventional flotation circuit that can process 2,000 tpd. It involves crushing, grinding, and selective lead and zinc froth flotation to produce lead and zinc concentrates. The metallurgical recoveries for the sulphide circuit in 2023 are 93% for silver, 58% for gold, 86% for lead, and 84% for zinc. The oxide ore goes through a conventional cyanide leach process that can process 400 tpd. It involves crushing, grinding, leaching, Merrill-Crowe zinc precipitation, and smelting of the precipitate to produce doré. The metallurgical recoveries for the oxide circuit in 2023 are around 82% for silver and 43% for gold.

The mineral reserve inventory of the La Colorada Vein Mine as of June 30, 2023, forms the basis of the LOM plan. The LOM plan involves an integrated operation where oxide and sulphide ore from the Candelaria and Estrella underground mines are processed at their respective plants, with about 95% of the ore tonnes going to the sulphide ore plant. The LOM plan covers the period from July 2023 to 2035 at target production levels, followed by a gradual decrease in production in 2036, the final year of the plan. To optimize the value of the mineral reserves, lower-grade ore is mined later where feasible, resulting in an average annual silver production of 6.5 Moz from 2024 to 2029 and 5.8 Moz from 2030 to 2035, assuming expected metallurgical recoveries.

1.6Environmental Studies, Permitting, and Social or Community Impact

An environmental impact statement (“EIS”) and a risk assessment of the existing La Colorada Vein Mine on the La Colorada Property were submitted to the Mexican environmental authorities in 1999. The EIS described the impact of proposed development and mining activities and provided conceptual plans for closure and remediation. The EIS was approved by the Mexican authorities in 1999 and an update of the EIS was approved in 2010. In 2013, the Mexican authorities approved a modification to the existing environmental permits to allow the expansion of the La Colorada Vein Mine and process plant to up to 2,000 tpd. A subsequent permit modification application to expand the plant production was approved in early 2015.

The environmental initiatives at the site aim to secure and restore the historical tailings facilities. In the qualified person’s opinion, there are no known environmental issues that could materially impact Pan American’s ability to extract the mineral resources or mineral reserves.

Pan American’s social performance strategy for local communities focuses on building trust and respect for human rights, managing its commitments and impacts, and, above all, improving the social and health conditions of the community while ensuring a safe environment. Pan American is dedicated to creating value by providing essential resources to local communities in a sustainable manner.

A closure cost estimate for the La Colorada Vein Mine is prepared according to the US State of Nevada’s approved Standard Reclamation Cost Estimator (SRCE) methodology. It is updated every year for unit costs and discount rates, and every other year for physical disturbance estimates, if necessary. Pan American’s current present value estimate of site reclamation costs is approximately US $7.0 million, effective December 31, 2022. No reclamation bond is required under Mexican law.

1.7Skarn Project Preliminary Economic Assessment

The Skarn Project PEA project proposes to develop a mine that uses a sublevel cave (SLC) mining method with a capacity of 50,000 tpd. The mine at the Skarn Project would be accessed by decline ramps and two ventilation shafts. The development phase would last six years after permit approval. A 50,000 tpd capacity processing plant using selective zinc and lead flotation and a filtered tailings storage facility would produce silver-bearing mineral concentrates at an average rate of 2,003 tpd of zinc concentrate grading 59% zinc and 846 tpd of lead concentrate grading 61% lead.

The average annual production for the first 10 years of operation would be 17.2 Moz of silver, 427 kt of zinc, and 218 kt of lead. The Skarn Project LOM is estimated at 17 years; this estimate does not include the 2023 drill results.

The following metallurgical test work programs have been conducted: mineralogical analysis, detailed comminution, flotation, and thickening and filtration of the tailings. The proposed processing plant is expected to produce high-grade zinc concentrate and a lead concentrate with high silver content, which can both be easily sold to market. The average zinc recovery over the LOM is 93.7% with a concentrate grade of 59% zinc and 97 g/t silver, while the average lead recovery is 84.3% with a concentrate grade of 61% lead and 1,438 g/t silver. The overall silver recovery is 84.8%, with most of it (72.5%) in the lead concentrate.

Over the LOM, the average unit operating cost (which covers mine, mill, and general and administrative costs) is estimated at US$40.88 per tonne.

The Skarn Project requires an initial capital cost of US$2,829 million, which will be spent over six years, most of it during mill construction in the fourth and fifth years. The initial investment is expected to be recovered in 4.3

years. The existing La Colorada Vein Mine’s operation will continue during the construction and development phase of the Skarn Project. The total LOM sustaining capital is estimated at US$951 million.

The cumulative after-tax cash flow is estimated at US$5,689 million. The after-tax net present value (NPV) is US$1,087 million at an 8% discount rate with an after-tax internal rate of return (IRR) of 14%, an NPV of US$1,572 million at a 6.5% discount rate, and an NPV of US$2,182 million at a 5% discount rate, using average LOM metal prices of US$2,800 per tonne zinc, US$2,200 per tonne of lead and US$22 per ounce of silver.

The proposed SLC mining method has been identified as a technically viable method of developing the Skarn Project. Future expansion and better definition of the mineralization could complement and expand the initial SLC mining inventory. Expanded SLC and block cave mining methods will be further evaluated in future studies.

Permits would be required to develop the Skarn Project, a new processing facility, a filtered tailings storage facility, and other surface infrastructure. Some current permits for the La Colorada Vein Mine are expected to benefit the Skarn Project in development and operations. The Skarn Project will also likely be subject to additional authorizations, consultations, and agreements in the normal course of business, as well as other risks and uncertainties.

The Skarn Project design will leverage the existing infrastructure at the La Colorada Property whenever feasible. The new facilities and the Skarn Project will be designed with a focus on automation, electrification, energy efficiency, and renewable energy sources to reduce the carbon footprint of the Skarn Project.

The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.

1.8 Conclusions and Recommendations

The PEA has shown the Skarn Project to be potentially economic and indicates it could be successfully mined by sublevel caving methods and the materials processed by standard crushing, grinding and flotation techniques to produce high quality saleable concentrates. The mining method involves a top-down sequence and has the benefit to the NPV by delivering the higher margin materials to processing earlier in the mine life. The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.

The results of the PEA support progressing the exploration to further delineate the lateral and depth extents of the Skarn Project mineral resources. The potential joint venture agreement with respect to certain adjacent mineral concessions would offer an opportunity to incorporate additional materials outside of the current boundaries of

the La Colorada Property, and to optimize the PEA mining shapes by expanding the current concession boundaries that constrain and truncate the current geometry.

•Assumptions related to commodity prices and foreign exchange rates.

•Unanticipated inflation of capital or operating costs.

•Significant changes in recovery or processing parameters.

•Geological and structural modelling and interpretation of the mineralization.

•Geotechnical assumptions, stress, seismicity, inrush and cavability of the mining zones.

•Inventory dilution or loss, and flow model calibration.

•Throughput and recovery rate assumptions.

•Changes in regulatory requirements that may affect the development, operation, tails disposal or future closure plans.

•Changes in closure plan costs.

•Changes in permitting or approvals requirements.

•Changes in downstream treatment and smelter charges and costs.

•Criminal and organized crime activity in some regions of Mexico.

2Introduction

The La Colorada mine (the La Colorada Vein Mine) is a collection of three underground silver-lead-zinc mines located in Zacatecas, Mexico, approximately 100 km south of the city of Durango and 155 km northwest of the city of Zacatecas. Pan American Silver Corp. (Pan American) holds a 100% interest in the 56 mining concessions (totaling approximately 8,840 hectares) that comprise the La Colorada property (the La Colorada Property) through its subsidiary, Plata Panamericana S.A. de C.V. (Plata). La Colorada Property currently operates the La Colorada Vein Mine which is comprised of two underground operating mines (Candelaria, Estrella) and one non-operational mine (Recompensa). The La Colorada Property also hosts the large polymetallic skarn exploration project (the Skarn Project) discovered in 2018 through brownfield exploration near the La Colorada Vein Mine.

Pan American is a Canadian-based leading producer of precious metals in the Americas that operates silver and gold mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. Pan American also owns the Escobal Mine in Guatemala, which is not currently in operation. Pan American has been operating in the Americas for nearly three decades, earning an industry-leading reputation for sustainability performance, operational excellence, and prudent financial management.

Pan American’s assets also include the following operations:

•100% ownership of the Jacobina underground gold mine in the state of Bahia of northeastern Brazil.

•100% ownership of the El Peñón underground gold-silver mine near Antofagasta in northern Chile.

•100% ownership of the Timmins operation in northeastern Ontario, consisting of two underground gold mines—the Timmins West Mine and the Bell Creek Mine—which both feed the Bell Creek mill.

•100% ownership of the Shahuindo open-pit gold mine in Cajamarca, Peru.

•100% ownership of the La Arena open-pit gold mine in La Libertad, Peru.

•100% ownership of the Huaron underground silver-zinc-copper-lead mine in Pasco, Peru.

•100% ownership of the Cerro Moro underground and open-pit gold-silver mine located in Santa Cruz Province, Argentina.

•100% ownership of the Minera Florida underground gold-silver mine located south of Santiago, Chile.

•95% ownership of the San Vicente underground silver-zinc-copper-lead mine in Potosí, Bolivia.

•100% ownership of the Escobal silver-gold-lead-zinc underground mine, in Santa Rosa, Guatemala. The operation is currently on care and maintenance pending completion of an ILO 169 consultation.

This technical report was prepared in accordance with NI 43-101; it documents the mineral resource and mineral reserve estimates for the La Colorada Vein Mine as of June 30, 2023. This technical report also describes the results of the preliminary economic assessment (PEA) of the Skarn Project, disclosed on December 18, 2023, and includes an updated mineral resource estimate for the Skarn Project. The PEA considers a 50,000 tpd sublevel cave mining method and a conventional 50,000 tpd capacity selective zinc and lead flotation processing plant and filtered tailings storage facility. Annual production is estimated to average 17.2 Moz of silver, 427 kt of zinc and 218 kt of lead during the first 10 years of an estimated 17-year mine life.

This technical report was prepared by Pan American following the guidelines of NI 43-101 and Form 43-101F1. The mineral resource and mineral reserve estimates reported herein were prepared in conformity with generally accepted standards set out in the CIM Mineral Resource and Mineral Reserves Estimation Best Practices Guidelines

(November 2019) and were classified according to CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014).

2.1Sources of Information

The qualified persons, as such term is defined in NI 43-101, for this technical report are Martin Wafforn, P.Eng.; Christopher Emerson, FAusIMM; Peter Mollison, P.Eng, Americo Delgado, P.Eng.; and Matthew Andrews, FAusIMM, all full-time employees of Pan American. Table 2-1 lists the qualified persons, their responsibilities, and personal inspections on the La Colorada Property.

In preparation of this technical report, the qualified persons reviewed technical documents and reports on the La Colorada Property supplied by on-site personnel and consultants. The documentation reviewed, and other sources of information, are listed at the end of this technical report in Section 27- References.

The most recent technical report on the La Colorada Property was compiled by Pan American with an effective date of December 31, 2019 (Wafforn et al., 2019). This 2019 Pan American report served as the foundation for this current technical report which updates the information as of an effective date of December 18, 2023.

3Reliance on Other Experts

The qualified persons have relied on information derived from Pan American’s internal records for information regarding legal matters related to land title and tenure information, and taxes (including royalties and other government levies or interests) applicable to revenue or income from the La Colorada Property, as described in Sections 4, 16, 19, 21, 22, and 24.

The qualified persons have not performed an independent verification of the land title and tenure information, as summarized in Section 4 of this technical report, nor have they verified the legality of any underlying agreement(s) that may exist concerning the permits or other agreement(s) between third parties, as summarized in Section 4 of this technical report. For these matters, the qualified persons of this technical report have relied on information provided by Pan American.

Except for the purposes legislated under applicable securities laws, any use of this technical report by any third party is at that party’s sole risk.

4Property Description and Location

4.1Location

The La Colorada Property is located in the Chalchihuites district of Zacatecas State, Mexico (Figure 4-1). It is approximately 100 km southeast of the city of Durango and 155 km northwest of the city of Zacatecas. The centre of the La Colorada Property is located at approximately 23° 22’ N lat. and 103° 45’ W long.

The La Colorada Vein Mine produces oxide and sulphide ores from three separate underground mines: Candelaria, Estrella, and Recompensa (no mining is currently taking place at the Recompensa mine). The La Colorada Property also hosts the Skarn Project, a large polymetallic skarn deposit discovered in 2018 through brownfield exploration near the La Colorada Vein Mine.

4.2Issuer’s Interest, Mineral Tenure, and Surface Rights

Pan American owns 100% of the La Colorada Property through its wholly owned subsidiary, Plata Panamericana S. A. de C.V. (Plata). The La Colorada Property, including certain exploration concessions outside the mining area, is comprised of 56 mining concessions totalling approximately 8,840 hectares (Figure 4-2 and Table 4-1). Pan American entered into a Memorandum of Understanding with respect to certain adjacent mineral concessions which would allow Pan American to access certain high-grade silver veins in the future, and has negotiated preliminary terms for a joint venture arrangement on certain adjacent mineral concessions, which would allow it to utilize these concessions for the Skarn Project.

On May 8, 2023, the Mexican government enacted a decree to reform various provisions of the mining law (the 2023 Decree), which was published in the Official Gazette and became law on May 9, 2023. Prior to the 2023 Decree, all concessions in Mexico had a lifespan of 50 years from the date of issue, with a potential to renew for an additional 50 years. Among other things, the 2023 Decree could reduce the renewal terms of current concessions, and the terms and renewal terms of future concessions, however, the impact of the 2023 Decree and its applicability to the La Colorada Property is uncertain. For further information regarding the 2023 Degree, please see Section 4.6.

Pan American pays an annual fee to maintain the concessions in good standing, and, to Pan American and the qualified person’s knowledge, Pan American has met all necessary obligations to retain the La Colorada Property. Pan American has control over, or rights in respect of, approximately 1,300 ha of surface rights that cover the main workings of the La Colorada Vein Mine. Pan American has acquired or is in the process of acquiring further surface rights related to the Skarn Project consisting of 2,000 ha of private land and leasing an additional 2,800 ha of ejido land. Plata is currently the owner of 18 of the 21 properties and continues negotiations for the remaining properties.

The mineral reserves, mineral resources, mine workings, processing plant, effluent management and treatment systems, and tailings disposal areas are all located within the mining concessions controlled by Pan American.

Table 4-1 shows the term of the concessions granted to Pan American. The 2023 Decree, if applicable, may impact the renewal terms of these concessions and the term of any future mining concessions.

4.3Royalties, Back-In Rights, Payments, Agreements, and Encumbrances

In 2016, Maverix Metals Inc. (Maverix) acquired from Pan American a gold stream equivalent of 100% of the payable gold production from the La Colorada Property, less a fixed price of USD$650 per ounce for the LOM. Triple Flag Precious Metals Corp. (Triple Flag) acquired Maverix on January 19, 2023.

Plata is subject to governmental taxes, fees, and duties, including a special mining duty (SMD) of 7.5% applied to taxable earnings before interest, inflation, taxes, depreciation, and amortization; and a deductible extraordinary mining duty (EMD) of 0.5% that is applied to the sale of gold and silver. To the best of Pan American and the qualified person’s knowledge, the La Colorada Property is not subject to any other royalties, overrides, back-in rights, payments, other agreements and encumbrances, or governmental taxes, fees, and duties.

4.4Environmental Liabilities

There are no known significant environmental liabilities on or related to the La Colorada Property. There are no known environmental issues that could materially impact Pan American’s activities on the La Colorada Property.

In December 2016, the Zacatecas state government enacted a new set of ecological taxes which took effect on January 1, 2017 (the Zacatecas Tax). The Zacatecas Tax targets carbon dioxide (CO2) emissions associated with the use of electricity and materials placed in tailings storage facilities. However, since the implementation of that tax in 2017, La Colorada Property has been exempted from taxes on tailings deposition as a result of a constitutional appeal (amparo). Pan American expect that this exemption will be extended to the Skarn Project (see Section 24). Therefore, Pan American is currently paying for its CO2 emissions released by fixed sources, and it is anticipated that only CO2 emissions will be taxable under the Zacatecas Tax.

4.5Permits

The mine workings, processing plant, tailings storage facilities, waste disposal areas, effluent management and treatment facilities, roads, and power and water lines have already been constructed and are located within the boundaries of the mining leases and surface rights controlled by Pan American. To the best of Pan American and the qualified person’s knowledge, all permits and licences required to conduct activities at the La Colorada Vein Mine have been obtained and are currently in good standing.

Future permits for any new mine components, including those for the Skarn Project discussed in Section 24, will depend on the location and engineering of the designed infrastructure. When project information becomes available, Pan American will determine the legal instruments relevant to permit application: either the Dictamen Tecnico Unificado (DTU), which unifies the Manifestacion de Impacto Ambiental (MIA) and Cambio de Uso de Suelo (CUS) or, alternatively, solely the CUS. The choice between these options will depend on the type of land designated for the project. The overall approval process consists of the preparation of documents and pertinent studies, the submission of required information to authorities, and the final authorization if no further materials or information is requested from the applicable governmental authority. A detailed permitting strategy and plan is being developed as details of the project components are confirmed.

4.6Significant Factors and Risks

Certain individuals have asserted community rights and land ownership over a portion of the La Colorada Property’s surface lands in the Agrarian Courts of Mexico. They have also initiated a process before the Secretariat of Agrarian, Territorial, and Urban Development of Mexico’s Federal Government (the SEDATU) in Zacatecas State, which has been transferred to SEDATU’s main offices in Mexico City, to declare such lands as national property. In February 2023, the Agrarian Court in Zacatecas resolved that the claimants did not prove their community rights and therefore they do not have any land ownership rights. In August 2023, the Superior Agrarian Court dismissed the appeal filed by the claimants. A further appeal has been filed with the Federal Court of Mexico by the claimants. The proceeding initiated before the SEDATU is still pending. If Pan American is unable to acquire or maintain access to these surface rights, there could be material adverse impacts on the La Colorada Property’s future mining operations. The land that is the subject of the SEDATU proceeding is approximately 1,200 hectares of the La Colorada Property. The SEDATU proceeding does not cover the land comprising the Skarn Project.

The 2023 Decree makes significant changes to the current mining laws, including but not limited to the following:

•Reducing the duration of mining license concession terms from 50 years (subject to a one-time renewal for a second term of 50 years) to 30 years (subject to a one-time renewal for a second term of 25 years).

•Restricting the granting of mining concessions requiring public auctions.

•Imposing conditions on water use and availability.

•Imposing regulations on mining concession transfers.

•Imposing additional grounds for cancellation of mining concessions and further limitations on mining in protected areas.

•Granting preferential rights to mining strategic minerals to state-owned enterprises.

•Imposing additional requirements for financial instruments to be provided to guarantee preventive, mitigation, and compensation measures resulting from social impact assessments, as well as potential damages that may occur during mining activities.

•Potentially requiring consultation with Indigenous Peoples’ (ILO 169).

These changes to the mining law have been appealed by numerous mining companies, including 13 amparos filed by Pan American which cover all of Plata’s concessions (including the La Colorada Property), as well as a formal constitutional challenge by members of congress. The applicability of the 2023 Decree is subject to the final resolution of the Supreme Court of Mexico. Should these various appeals be ultimately unsuccessful, the 2023 Decree is expected to have impacts on Pan American’s current and future exploration activities and operations in Mexico, the extent of which is yet to be determined but which could be material.

Pan American is exposed to many risks in conducting its business, both known and unknown, and there are numerous uncertainties inherent in estimating mineral reserves and mineral resources and in maintaining viable operations. Although the qualified persons and Pan American have no current expectation that the mineral reserve and mineral resource estimates in this technical report will be materially negatively impacted by external factors such as environmental, permitting, title, access, legal, taxation, availability of resources, and other similar factors, changes in relation to such factors are not uncommon in the mining industry and there can be no assurance that these factors will not have a material impact. For example, the third-party claims initiated before the SEDATU with respect to a portion of Pan American‘s surface rights described herein could, if determined adversely, have a material impact on the La Colorada Property’s operations.

The political, economic, regulatory, judicial, and social risks related to conducting business in foreign jurisdictions, and changes in metal and commodity prices, pose particular risk and uncertainty to Pan American and could result in material impacts to Pan American’s business and performance. In addition to external factors and risks, the accuracy of any mineral reserve and mineral resource estimate is, among other things, the function of the quality and quantity of available data and of engineering and geological interpretation and judgment. Results from drilling, testing, and production, as well as a material change in metal prices, changes in the planned mining method, or various operating factors that occur subsequent to the date of the estimate may justify revision of such estimates and may differ, perhaps materially, from those currently anticipated, and readers are cautioned against attributing undue certainty to estimates of mineral reserves and mineral resources.

5Accessibility, Climate, Local Resources, Infrastructure, and Physiography

5.1Physiography, Vegetation, and Climate

The La Colorada Property is located in the North American Cordillera, within the mountains of the Sierra Madre Occidental. The Sierra Madre Occidental is the largest continuous mountain range in Mexico and extends for approximately 1,500 km along the western margin of Mexico, parallel to the Pacific coast. It forms the western boundary of the Central Mexican Plateau, a large, elevated plateau extending from the US border in the north to the Trans-Mexican Volcanic Belt in the south. The elevated area within the southern portion of the CMP is referred to as the Mesa Central, which includes the states of Mexico, Guanajuato, Queretaro, Hildago, San Luis Potosi, and portions of Zacatecas and Jalisco. In the state of Zacatecas, which hosts the Zacatecas mining district, the Sierra Madre Occidental mountains partially overlap into the Mesa Central.

The physiography of the area is characterized by wide flat valleys and narrow, relatively low mountain ranges and hills at elevations ranging between 2,100 and 2,550 metres above sea level. The climate is arid to semi-arid, with vegetation typically including mesquites, pines, and cacti. The rainy season is from July to September, and winter temperatures are around freezing at night. The La Colorada Vein Mine operates year-round.

5.2Accessibility, Local Resources, Population Centres, and Transport

The La Colorada Property is accessible from the city of Durango by a 120 km paved highway and a 23 km public, all-weather gravel road. The La Colorada Property is also accessible from the city of Zacatecas by similar types of roads. Both cities are major industrial and supply centres for the region and are a source of experienced workers. Flights to both cities are scheduled daily from Mexico City and other major commercial and industrial centres in Mexico. Chalchihuites, with a population of approximately 10,500 and located 16 km northwest of the La Colorada Property, is the closest municipality.

5.3Surface Rights

The mine workings, processing plant, tailings storage facilities, waste disposal areas, effluent management and treatment facilities, roads, and power lines are located within the boundaries of the mining concessions and of approximately 1,300 ha of surface rights controlled by Pan American.

5.4Power and Water

Pan American has agreements in place with the national power utility, Comisión Federal de Electricidad (CFE), for the supply of power sufficient for the current operating plans. The La Colorada Vein Mine also maintains diesel generators onsite to provide backup power when necessary. Water for the mining operation is supplied from the underground mine dewatering systems, tailings facilities, and wells located on the La Colorada Property; the water supply is adequate for the existing and planned future requirements of the La Colorada Property.

5.5Infrastructure

The surface infrastructure includes the plant processing facilities, tailings and waste rock storage facilities, offices and workshops, accommodation camps, change houses, warehouses, fuel and lubricant facilities, water and diesel tanks, surface electrical distribution, air compressors, explosive magazine, water treatment plants, sludge settling ponds and piping, surface ventilation fans, mine portals, run-of-mine ore stockpiles, domestic waste landfill, roads, surface grading and drainage, security gates and fencing, and satellite communication.

6History

In 1925, the Dorado family operated mines at two locations on the La Colorada Property. From 1929 to 1955, Candelaria y Canoas S.A., a subsidiary of Fresnillo S.A., installed a 100 tpd flotation plant and processed the old dumps of the two former mines. La Compañas de Industrias Peñoles also conducted mining operations on the La Colorada Property from 1933 to the end of World War II. From 1949 to 1993, Compañia de Minas Victoria Eugenia S.A. de C.V. (Eugenia) operated a number of mines on the La Colorada Property. In 1994, Minas La Colorada S.A. de C.V. (MLC) acquired the exploration and exploitation claims and surface rights of Eugenia and conducted mining operations until 1997 on three of the old mines at a rate of approximately 150 tpd. Exploration during this period was mainly in the form of development along known veins. Prior to Pan American’s ownership of the La Colorada Property, 131 diamond drill holes had been drilled.

In 1997, Pan American entered into an option agreement with MLC. Pan American then conducted exploration and diamond drilling as part of its due diligence process. In April 1998, Pan American acquired the La Colorada Property from MLC and has since focused its production on the Candelaria, Estrella, and Recompensa mines.

In 2016, Maverix acquired from Pan American a gold stream equivalent of 100% of the payable gold production from the La Colorada Property, less a fixed price of USD$650 per ounce for the LOM. Triple Flag acquired Maverix on January 19, 2023.

6.1Historical Mineral Resource and Mineral Reserve Estimates

Although a number of historical mineral resource estimates and mineral reserve estimates have been prepared for the La Colorada Property throughout its life, none of these estimates are currently regarded as significant.

6.2Past Production

The production prior to Pan American’s ownership is not readily available. Pan American started small-scale production in January 2001 from surface stockpiles and underground development headings. Full-scale production started in mid-2003. Production of silver, gold, zinc, and lead are tabulated in Table 6-1.

7Geological Setting and Mineralization

7.1Regional Geology and Geological History

The La Colorada Property is located within the Sierra Madre Occidental (SMO) mountains, on the western margin of the Mesa Central within the Guerrero Composite Terrane (GCT) (Figure 7-1).

Mexico is split into several tectonostratigraphic terranes: crustal regions, bounded by major faults, that share the same geological history. The La Colorada Property is located within the GTC close to the thrust fault that forms the eastern boundary between the GCT and the Oaxaquia Terrane (Ebner, 2023). The Oaxaquia Terrane is a Gondwana crustal fragment which is composed of a Precambrian gneiss basement, covered by Paleozoic sediments and capped by Permian volcanic and volcaniclastic rocks. The GCT is a geologically varied and complex region to the west of the Oaxaquia Terrane. It formed as a result of crustal uplift and sedimentation as the Farallon Plate was thrust onto the Gondwana crustal fragment during Laramide-age subduction and is characterized mostly by submarine and locally subaerial volcanic and sedimentary successions that range in age from Jurassic to middle-Late Cretaceous.

The oldest rocks on the GCT were formed at the start of subduction and consist of Jurassic-age, deep water, near-slope turbididites, sub-aerial volcanic rocks (which formed at the subduction zone), and back-arc continental sandstone and conglomerate red beds with volcanic clasts. These are overlain by extensive early- to late-Cretaceous back-arc basin deep-sea limestone and mudstone sequences, which transition to reef and shallow marine limestone sequences.

Continued subduction-related E-W compression during the Cretaceous to Eocene resulted in uplift and deformation of the Cretaceous limestone sequences. Widespread erosion and a large-scale hiatus in sedimentation occurred at the end of the Cretaceous with only localized colluvial conglomerate deposits preserved in the rock record. Some plutonic rocks were emplaced during this period.

A relaxation of the regional compressional environment during the Eocene (between ~66 and 37Ma) resulted in voluminous calc-alkaline intermediate to felsic volcanics deposits known as the Lower Volcanic Complex (LVC) (Ebner, 2023). Volcanic composition changes throughout the LVC with andesitic-rich lower portions grading to rhyolite-rich towards the top contact. The LVC forms the base of the SMO volcanic belt.

During the Late Paleocene to Middle Eocene the regional structural setting of the GTC shifted from E-W compression to NE-SW extension as the Farallon and North American plates continued to collide at variable intensities and rates in different sections of the subduction zone. This extensional setting gave rise to grabens, half grabens, horsts and tilted blocks, and resulted in local thrusting of the older Mesozoic marine sediments on surface. Several of these Mesozoic thrust panels, referred to as inliers, are exposed in the region. The La Colorada Property lies on one such inlier, known as the Chalchihuites inlier. Concurrent with thrusting, sedimentary basins developed across central and southern Mexico forming continental red beds comprising of volcanic-clast conglomerates interlayered with lava flows.

Continued Middle Eocene and Oligocene extension resulted in the deposition of the upper volcanic sequence ( UVS). It forms the upper unit of the SMO volcanic belt and was emplaced in two pulses between 32Ma and 20Ma (Ebner 2023). The UVS deposits generally have well defined bedding and multiple tuffaceous horizons. They are capped by Pliocene to Quaternary volcanic deposits and landforms, and Quaternary conglomerates.

7.2Regional Structural Geology

Five distinct deformation phases, from the late Mesozoic to Tertiary, are recognized in central Mexico (Starling 2022), and observed on the La Colorada Property:

•D1 – Early Laramide (~80-60 Ma) ENE compression caused by the subduction of the Farallon plate beneath Gondwanaland, resulted in low angle folding and thrusting of the Mesozoic marine sediments.

•D2 – Late Laramide (~60-40 Ma) NNE compression and contractional deformation, caused by the passage of the Caribbean Plate between the North and South American plates reactivated low angle northwest-trending basement structures, thought to be the main control on porphyry copper and associated orogenic gold deposits in Mexico.

•D3 – Early post-Laramide (~38-28 Ma) N-S to NNE extension resulting from the completed migration of the Caribbean Plate between the North and South American plates and the continued separation of the two continents. The low angle northwest-trending thrust faults were reactivated with sinistral trans-tension, producing E-W to NW-SE normal faults and tension fractures between the sets of reactivated faults. The majority of the epithermal vein, skarn, and CRD deposits found in the older SMO rocks in Mexico are thought to be associated with this deformation phase.

•D4 – Main stage Basin and Range ENE extension (~28–18Ma) caused by slower subduction of the Farallon Plate beneath Gondwana resulted in NNE and NW-orientated normal faulting and tilting of the SMO volcanic units. D5 – WNW extension in central and southern Mexico (~12–0Ma) related to the onshore projection of the subducting oceanic ridge as part of the N-S-trending East Pacific Rise. This event results in a series of N-S to NNE trends extending into the Altiplano with major faults that border the western side Fresnillo District and define the Zacatecas horst block.

The La Colorada Property is located within a regional WNW trending structural corridor that coincides roughly with the northeastern boundary of the GCT (Figure 7-2) and an ESE structure that forms along the southern margin of the Chalchihuites inlier.

7.3Regional Mineralization

The La Colorada Property is located in the Zacatecas mining district, within the Mexican Silver Belt (MSB). The MSB is oriented approximately NW-SE and extends from the southwestern United States in the north of the TMVB in the south. Many of the major MSB deposits are located within the SMO mountains and associated volcanic belt. The region contains epithermal Ag-Pb-Zn + Au + Cu vein, and polymetallic skarn, carbon replacement deposits (CRD), and porphyry deposits (Figure 7-3).

Epithermal Ag-Pb-Zn +/- Au intermediate sulphidation (IS) epithermal veins within the MSB are generally hosted in dacites of the LVC and in the underlying Cretaceous sedimentary sequences and tend to be older than 30 Ma (Ebner 2023) (Figure 7-3). Polymetallic CRD and skarn mineralization replace the Cretaceous limestone units , appear similar in age and composition to the IS epithermal veins, and may be genetically related to them (Ebner 2023). Ongoing studies may corroborate this hypothesis or determine that they result from different events within the evolution of the hydrothermal system. Gold-rich low sulphidation (LS) epithermal deposits are also found in the MSB and these tend to be hosted in the UVS rhyolites (younger than 30 Ma) and are controlled by large-scale NNE- and NNW-striking extensional faults (Zamora-Vega et al, 2018). The MSB also hosts additional volcanic-hosted massive sulphide, iron-oxide copper and gold, orogenic gold, carbonatite, pegmatite, tin vein and placer deposits (Ebner 2023).

7.4Property Geology

The general stratigraphic column for the La Colorada Property is shown in Figure 7-4.

The lower Cretaceous sedimentary rocks of the Fresnillo Formation constitute the base of the stratigraphic sequence and are composed predominantly of thick, fine-grained limestone beds interlayered with sandy mudstone and calcareous sandstones that were deposited in shallow marine and terrestrial environments. The unit does not outcrop on the La Colorada Property and, although it may be present at depth, the upper contact with the overlying Cuesta del Cura Formation has not been identified, possibly masked by skarn recrystallization of the limestone units. Regionally, the limestone beds of this formation provide an important host to mineralization.

The overlying Lower Cretaceous Cuesta del Cura Formation consists of thinly interbedded dark grey to black limestones, pelagic shales, black chert and calcareous mudstones. It was deposited in a reef environment. It has been intersected in drill holes over a unit thickness of at least 1,000 m and constitutes the predominant limestone stratigraphic unit and primary host to skarn alteration and mineralization at La Colorada Property. The Cuesta del Cura Formation is the oldest stratigraphic unit to outcrop on the La Colorada Property (Figure 7-4).

The Cuesta del Cura Formation is overlain by the Indidura Formation, an Upper Cretaceous sequence of thinly bedded shales interbedded with clayey limestone, calcareous sandstone and siltstone. The unit is light grey to yellow, commonly exposed in synclinal axes, and reaches a thickness of 100 m in the district.

The Laramide compressional events caused fracturing, faulting and folding of the Cretaceous sediments. These units generally dip shallowly towards the southwest in the La Colorada Property.

The limestone units are unconformably overlain by the Late Cretaceous to Early Paleocene Ahuichilla Formation which is a terrestrial red conglomerate formed at the base of steep slopes and cliffs as a result of gravitational material movement. The formation contains variably-sized, sub-rounded limestone, flint, sandstone, shale and dacite fragments within a consolidated calcareous clay matrix. At the La Colorada Property the Ahuichilla Formation is irregularly distributed but where present is approximately 40 m thick and dips t towards the northwest.

The sedimentary units are discordantly overlain by the northeast dipping dacite flows and tuffs of the LVC. Laramide-age fractures and faults provided conduits for the Late Cretaceous – Eocene intrusive phase of this unit and its associated hydrothermal fluids. Where intrusions and hydrothermal veins were in contact with the Mesozoic sediments, metamorphism and recrystallization, primarily of the limestone units, has occurred, resulting in marble, hornfels and skarn lithologies. At the La Colorada Property, the LVC has been the host of the majority of the epithermal IS Ag-Pb-Zn vein mining to date. LVC is approximately 825 m thick, dips moderately to the NE and is the dominant outcropping unit on the La Colorada Property.

The UVS rhyolite tuffs and ignimbrites unconformably overlie the LVC and dip gently to the south and southeast. Together the SMO volcanic rocks extend up to 1,200 m in thickness and covers the majority of the La Colorada Property to the east.

Quaternary conglomerates unconformably overlie the UVS in the NE and NW corners of the La Colorada Property.

Several blind intrusive bodies and phases of brecciation and veining have been identified at depth. Descriptive details in chronological order of emplacement follow:

1.Andesite porphyry forms both a large intrusion and dykes. This intrusive unit is cut by all the other intrusive phases.

2.Dacite porphyry dykes (dated at ~67Ma (Ebner 2023)) which appear to be feeders for the LVC intrusion. This intrusive phase is considered the primary source of the skarn mineralization (Chang 2021 internal report).

3.Rhyodacite intrusion and dykes, dated at around 63 Ma (Ebner 2023), are thought to be related to syn- to post-skarn mineralization. Representing the largest intrusion identified to date on the La Colorada Property, it may be responsible for mineralization in some areas (Chang 2021 internal report).

4.Several post-skarn breccias are observed on the La Colorada Property. They generally occur in or near marble units or faults and are fairly localized (only a few metres wide). These breccias are thought to have formed at low temperatures with minimal transportation or movement of the brecciated material. These breccias are interpreted as dissolution or collapse breccias that occurred after the skarn and associated mineralization events (Chang, 2021 internal report).

5.Several breccias on the La Colorada Property are related to a breccia pipe that present diverse fragments and evidence for several phases of brecciation. These breccias are developed mainly in the area between the 901 and 902 mineral zones (as seen on Figure 7-5 below) structurally controlled along the NC2 - Vein 3 trend. Economically significant mineralization occurs where skarn fragments within this breccia pipe. Fine-grained, late-stage andesite dykes, related to the divergence of the Baja California Peninsula from the main continental plate, cut across all other intrusive and stratigraphic units including the LVC.

6.Epithermal veins, which preferentially follow structural planes, cut across the LVC and all underlying stratigraphic units. These veins are the focus of the La Colorada Vein Mine.

7.Small breccia bodies exposed at surface and in underground workings at the La Colorada Vein Mine are believed to post-date epithermal veins. These breccias, in contrast to the skarn breccia, are umineralized, localized and have limited continuity/expression at depth.

Figure 7-5 shows surface geology, mineralization and major interpreted structures in the area of the La Colorada Vein Mine and the Skarn Project.

7.5Local Structure

All regional structural events are evident on the La Colorada Property, though Stages D1 to D3 are the principal events that affect mineralization. The major structures related to mineralization and surface geology are shown in Figure 7-5. The effects of structural deformation of local geology is described as follows:

•Structural phase D1 created in NNW-trending folds and thrusts in the Mesozoic sediments with fault displacement between tens to over hundreds of metres.

•The D2 structural phase is associated with NNE trending dextral shearing and is thought to control the orientations of porphyry intrusions and breccias.

•D2 structures were reactivated during the D3 structural phase along a sinistral orientation, and ESE and NNE trending secondary shear structures formed. The dextral and sinistral movement on the normal faults formed NE striking dilation zones which host the epithermal vein mineralization, and as such, the epithermal vein locations delineate the major northeast trending structures throughout the La Colorada Property.

•The D4 and D5 structural events tilted fault blocks to the ENE and ESE by as much as 10-20°.

7.6Local Mineralization

Epithermal intermediate sulphidation Ag-Pb-Zn vein, CRD, and polymetallic skarn mineralization has been identified at the La Colorada Property. The upper portions of epithermal vein system have been the historic focus of the currently operating La Colorada Vein Mine, while the skarn and CRD mineralization is currently being defined and characterized by ongoing drilling and technical studies.

7.6.1Epithermal Vein Mineralization

Fractures and faults formed during the D1 to D3 deformation events acted as conduits for emplacement of epithermal vein mineralization. There are three ENE to E-W-trending principal vein structures which, from NW to SE, are named Recompensa, Amolillo and NC-HW. Each vein has second order sub-parallel splays and duplexes, and there are also several NW- to WNW-trending veins. In general, the principal veins are strongly brecciated, locally oxidized, and often exhibit irregular vein boundaries. Most of the mineralization of economic significance is located in quartz veins that average 1 metre to 2 metres wide, but may be significantly wider. The vein fillings consist of quartz, calcite, and locally barite and rhodochrosite. Galena, sphalerite, pyrite, native silver, and silver sulphosalts are present in unoxidized veins. The major mineralized veins are strongly brecciated and locally oxidized. Amolillo strikes over 1.5 km to the northeast and dips 60° to the southeast, for over 800 metres down dip. The average vein width is 2.2 metres. The NC series of veins lies around 700 m to the southeast of Amolillo. The most significant of these veins, NC2, strikes around 1.2 km to the northeast and dips 75° to the southeast, for over 1 km down dip. The average vein width is 1.9 metres. The HW series is the western continuation of the NC series, strikes east-west, and dips 50° to the south, for over 600 m down dip. The average vein width is 1.8 metres. Veta 3 runs parallel to the HW and NC series, strikes for over 900 m to the northeast, and dips 75° to the northwest, for around 400 m down dip. The average vein width is 1.7 metres. Well banded epithermal textures are rare. Vein breccias generally lack cohesiveness and consequently show very little surface expression. Veins typically occur as narrow feeders with massive sulphides in the upper portion of the system.

7.6.2Polymetallic Skarn and CRD Mineralization

Faults, primarily formed during the D2 deformation event, acted as a conduit for the intrusion of several porphyries and their associated hydrothermal fluids. To date, two intrusive centres with similar characteristics have been identified: the main intrusive centre located between the 901 and 903 zones of the Skarn Project; and a second centre north of the Skarn Project’s 902 zone.

Emplacement of the intrusions fractured the sedimentary rocks and increasing porosity and permeability of the limestone host rocks which were metamorphosed where in contact with the hot fluids. Additional mineralogic changes resulted from cooling and infiltration of groundwater in the porous areas. Recrystallization and mineralization occur predominantly around intrusive bodies and is associated with intrusive sills, dykes or offshoots, and tends to follow the sedimentary bedding.

The evolution of the skarn system begins with contact metamorphism that in its early phase gives rise to the occurrence of marble, calc-silicate hornfels and recrystallized limestone. Metasomatism progresses to a prograde phase forming garnet, pyroxene and wollastonite and later develops into a retrograde phasethat consists of two stages:

•An early stage associated with epidote, amphiboles, illvanite, vesuvianite, magnetite, hematite and muscovite;

•This is followed by a late stage associated with chlorite, quartz, calcite, rhodonite, and sulphides containing molybdenum, copper, zinc, lead, silver and manganese.

The final stage of skarn development is a distal phase consisting of CRD replacement bodies and veinlets of carbonate with sulphides. CRD deposits are high temperature polymetallic deposits formed in proximity to porphyry systems. Carbonate host rocks are replaced by massive sulphides with mineralogy that varies according to the distance from the intrusion. CRD bodies typically occur in the limestone near vein contacts or above the skarn.

7.6.2.1Mineral and Metal Zonation

Skarn minerals include garnets, pyroxenes, pyroxenoids and amphiboles. Almandine and andradite are the most common types of garnets with rare occurrences of grossularite and uvarovite garnet. Well developed zonation of garnet species occurs within the skarn units as a function of proximity to the porphyry intrusion. Zones close to the intrusion are characterized by predominantly dark brown to red almandine garnets with lesser light-coloured pyroxenes. With increasing distance from the causative intrusion, garnet content decreases and the garnet species transitions to a distal zone characterized by dominant dark pyroxenes with lesser green to yellow andradite garnets. In many distal areas, no garnets are visible and the skarn is composed entirely of dark pyroxenes. The zonation follows a general NW-SE trend in the main mineralized zone with a secondary NE-SW trend in the extreme northeast.

Mineralization is associated with sulphides closely associated with skarn development and the onset of hydrothermal alteration of early skarn minerals. Sulphide textures vary from disseminated and patchy to semi-massive and massive. Zinc, in the form of sphalerite, is typically yellowish-brown to reddish brown, and is accompanied by galena, pyrite, chalcopyrite and magnetite. CRD mineralization consists of massive to semi-massive sulphides.

Zinc, lead, copped, silver and, to a lesser extent, gold grades are strongly associated with host skarn lithology and are inversely proportional to proximity to the intrusion (i.e., grades are lower in close proximity). The CRD and pyroxene skarn units away from the intrusion, are therefore associated with the highest grades while the dark brown to red garnet skarn is associated with the lowest grades. The marble and porphyry units host minor mineralization; with in the limestone mineralization occurs primarily as veins or veinlets.

Metal zonation is present in the system: copper is highest in the intrusive and immediately proximal to the causative intrusion. Molybdenite grade is proportional to copper grade in the porphyry, and iron content follows copper in the proximal dark brown to red garnet skarn. Zinc-lead-silver mineralization occurs in the transition zone between almandine and andradite garnets and grades to lead-zinc-silver towards the distal zone where pyroxenes and CRD predominate and are associated with the highest grades.

7.6.2.2Skarn Morphology

The Skarn Project is comprised of several zones of mineralization located between 700 m and 1,900 m below surface, extending some 1,800m in a NE-SW direction and 650m in a NW-SE direction. Skarn geometry is dependent on the shape of the causative intrusion, the composition and orientation of the stratigraphy, and the lithological contacts that generate permeability in the host rock. Economic skarn mineralization is well developed in the retrograde stages in skarn layers ranging from a few centimetres to tens and hundreds of meters thick. The skarn system is currently defined by three zones of economic mineralization with corresponding zone numbers. These are termed the West Zone (902 zone), Central Zone (901 zone), and East Zone (903 zone).

There is evidence of E-W to NE-SW stratigraphic and structural control on mineralization, similar to that of the epithermal system. Figure 7-6 below shows a typical cross section through the Skarn Project.

8Deposit Types

La Colorada Vein Mine is considered a typical hydrothermal polymetallic deposit located in a region with significant silver and base metal production from well-known vein and skarn deposits.

The La Colorada Vein Mine’s intermediate sulphidation epithermal vein model considered for exploration and mineral resource and reserve estimation transitions from silver-rich mineralization at surface to more base metal-rich mineralization at depth.

The Skarn Project deposit is a typical Mexican porphyry-related skarn system associated with andesitic, dacitic and rhyodacitic intrusive bodies and dykes in contact with limestone and siltstone. Significant economic mineralization occurs in light garnet skarn, light and dark pyroxene skarn and in the collapse breccias dominated by skarn fragments. Garnet and pyroxene skarn zones contain zinc, lead, copper, and silver mineralization. The presence of late andradite garnet and pyroxenes (johansenite and hedenbergite) are distinctive in the calcic skarn found in the Skarn Project and exemplify a zinc-dominant skarn deposit.

Mineralization is related to multiphase hydrothermal and magmatic activity and occurs as various types, such as CRDs, breccia pipes and epithermal silver-lead-zinc systems. Some evidence for copper molybdenum porphyry mineralization demonstrate the full evolution of the hydrothermal system.

Multiple phases and superposition of hydrothermal events suggest that magmatic and hydrothermal activity has continued over time and may have produced possible deeper telescoping systems. Early-phase magmatic activity commenced with the emplacement of a copper-molybdenum porphyry, continued with the formation of a skarn-CRD deposit, and concluded with the development of epithermal veins, mantos, and hydrothermal breccias.

The skarn mineral paragenetic sequence is defined by the formation of magnetite, hematite I, pyrite, chalcopyrite and molybdenite at the end of the early porphyry phase and continued to the beginning of the late epithermal phase. Sphalerite, galena, tennantite, tetrahedrite and argentite and related clays and iron oxides are exclusively related to the later epithermal phase. (ASPAR November 2019-January 2020.)

Figure 8-1 shows a typical anatomy of a Mexican epithermal vein, skarn and CRD deposit.

9Exploration

The La Colorada Property was mined for several decades prior to any systematic exploration work. Most major structures were discovered through underground mine development before Pan American.

When the La Colorada Property was under option, Pan American conducted exploration and diamond drilling as part of its due diligence process. Since Pan American acquired the La Colorada Property, staff and consulting structural geologists have carried out near-mine surface and underground geological and structural mapping.

9.1Sampling

Systematic sampling of underground channels and raises is conducted for grade control and mineral resource and reserve estimates as mining progresses.

The significant exploration results at La Colorada Property that are material to this technical report were obtained by core drilling (surface and underground) and underground channel sampling. This work and resulting interpretations are summarized in Sections 10, 14, and 15 of this technical report.

9.2Geophysics

Between September 1997 and March 1998, while the La Colorada Property was under option, Pan American conducted very low frequency radio (VLF) and induced polarization (IP) geophysical surveys. In 2019, Zonge International, Inc. (Zonge) conducted a magnetotelluric (MT) geophysical survey over the Skarn Project area using Zonge High-Resolution ZEN receivers, operating with four or six channels equipped with 32-bit analog-to-digital converters. A total of 13 line-km of geophysical data were collected on six NE-SW oriented lines. In 2022, Zonge extended the MT survey with an additional 18.2 line-km distributed in twelve NE-SW oriented lines and by extending two lines from the first survey. The geophysical data was used to create 2D and 3D inversion models to assist with drill targeting of the Skarn Project at depth.

10Drilling

Pan American initiated systematic testing of the silver-gold-lead-zinc-bearing zones in 1997 and has drilled continuously since then to expand the mineral resource and replace depletion of mineral reserves. Prior to acquisition by Pan American, MLC drilled 8,665 m in 131 core drill holes. To the end of June 2023, over 757,000 m have been drilled at the La Colorada Property in both the La Colorada Vein Mine areas (Recompensa, Estrella, and Candelaria) and the Skarn Project deposit (Table 10-1). This includes drilling between 342 drill holes (for 282,555 m) targeting the Skarn Project, of which 181 drill holes (126,697 m) were directional drilling from pre-existing drill holes to reach target depths.

Figure 10-1 illustrates the location of drilling in the La Colorada Property. Significant exploration results and interpretations obtained from surface and underground drilling are summarized in Sections 14 and 15 of this technical report.

Drilling and channel sampling are conducted continuously in the La Colorada Vein Mine area for the purpose of developing drill targets, upgrading mineral resources, converting mineral resources to mineral reserves, and replenishing depleted mineral reserves. Drilling density varies by category: brownfield potential is drilled at >100 m spacing, inferred mineral resources are drilled at 80 to 100 m spacing, and measured and indicated mineral resources are drilled on a 60 × 60 m grid.

Preliminary mineral resource estimates are made using the drill information. Later, the mineral resource models are refined using chip sample assays collected from the underground development along channels.

Underground definition core drilling is completed on a 40 × 40 m grid where required, and short test drill holes are drilled from underground at a 20 × 20 m grid to locate veins and parallel structures and to assist with mining and grade control.

Exploration and mineral resource definition of the Skarn Project has been conducted using deep core drilling and directional drilling from pre-existing holes, to allow access to the target depth; the drill spacing in this area varies from a few metres to >100 m.

Geologists and technicians at La Colorada Property follow a series of standard operating procedures for the planning and execution of core drilling programs as well as underground channel programs; their application by all operators has been consistent with industry standards.

10.1Drilling Procedures

Drill core diameter ranges from PQ (85 mm), HQ (63.5 mm), NQ (47.6 mm), and BQ (36.4 mm) depending on location and hole depth. The current core drilling procedures are summarized as follows:

1.Prior to drilling, the collar locations of all drill holes are marked with the Minnovare Azimuth Aligner equipment by the La Colorada survey crews; the collars are surveyed using a differential base-station GPS after the completion of drilling.

2.A Reflex multi-shot survey instrument is used to measure directional downhole deviation (both azimuth and inclination); readings are taken at intervals of 30 m for single drill holes and every 1 m for directional drill holes during the curve process.

3.Core is placed in labelled plastic boxes at the drill site and the boxes are taped and secured before transportation by the drill contractor to the logging facility.

4.Pan American geologists conduct lithological and geotechnical logging of drill core, describing all downhole data including selected assay intervals. This information is recorded in digital format using Datamine DHLogger. The following features are recorded:

•Core diameter.

•Lithological descriptions that include:

◦Lithological contacts.

◦Type and intensity of various alterations.

◦Geological structures (faults, fractures, veins, veinlets, etc.).

◦Structural measurements (core angles).

•Geotechnical description (core recovery and rock quality designation measurements).

•Sampling intervals that respect lithological contacts; these are marked and labelled.

5.Core is photographed and images are stored in a cloud-based software (Imago from Seequent).

No overall core recovery statistics were reviewed, but overall core recovery is estimated at > 95% for core drilled with contractor drill rigs (both veins and skarn) and > 82% for core drilled with Pan American drill rigs (veins). The sampled core provides a reliable representation of the mineralization in the mining operation.

10.2Underground Channel Sampling Procedures

The geologists or technicians who carry out the marking of the samples in the drift first check the mapping and sampling information of the previous drift. The collar location of the channel is identified in local mine grid coordinates, which are supplied by survey crews along the drift. The collar is identified on the left side of the drift. The width of the drift is measured with a measuring tape, perpendicular to the general strike of mineralization. In most of the cases the footwall, vein, and hanging wall samples are taken from the face. The sampled underground faces provides a reliable representation of the mineralization in the mining operation.

10.3Material Impact on the Accuracy and Reliability of Drilling Results

There are currently no known drilling, sampling, or recovery factors that are reasonably expected to materially impact the accuracy and reliability of the results.

11Sample Preparation, Analyzes, and Security

Analytical samples include both drill core and channel samples. The drill core samples are generated from exploration and infill drilling programs that are conducted on surface and underground; they are used for target generation and estimation of mineral resources and mineral reserves. The channel samples come from underground grade control channels in development drifts; they are used for short-term forecasting and grade control as well as for estimation of mineral resources and mineral reserves.

11.1Sample Preparation and Security

All sampling is conducted on-site by Pan American personnel under the supervision of experienced Pan American geologists.

Core drill holes are processed in a secure core logging facility located on the La Colorada Property; the core is logged and photographed. Samples, of a maximum length of 2 m, are selected based on their geological features. Sampling consists of cutting the core in half with a diamond-bladed saw; one half of the core is placed in previously labelled plastic bags containing two sample number tags, and the other half is left in the core box as a reference. The sample bags are sealed with security straps and placed in sealed sacks which are then sent to the primary laboratories; samples from the La Colorada Vein Mine are sent to the La Colorada internal mine laboratory (the La Colorada Laboratory), operated by Pan American, and samples from the Skarn Project are sent to external laboratories.

The sampling of underground faces is carried out systematically by production geologists and technicians in the advance galleries after each advance. After the face is washed and secured, samples are taken from the bottom of the structure to the top. The sample location is determined by measuring the distance and azimuth from the nearest bolt left by the surveying team.

Geological contacts marking changes in lithology, alteration, mineralization, structures, etc., are identified and sampling intervals respect these contacts. The sample boundaries are marked on the face; the maximum channel sample length is set to 1 m. Sampling is done with a rock hammer or with a mallet and wedge. The resulting rock fragments that detach from the wall are placed in plastic bags properly identified with correlative sample tags. The samples are then transported to the La Colorada Laboratory for preparation and assaying.

The security measures used to ensure that the samples are not contaminated or tampered with include sealing the sample containers with tamper-evident seals, storing the samples in secure locations, and limiting access to the samples.

11.2Analytical Procedures

Most of the drill core and underground channel samples from the La Colorada Vein Mine areas are prepared and analyzed by the La Colorada Laboratory, which is operated by Pan American. Certain vein-bearing drill holes are prepared by independent laboratories; these include SGS Minerales (SGS) located in Durango, Activation Laboratories Ltd (Actlabs) located in Zacatecas, and Bureau Veritas located in Hermosillo for sample preparation and in Vancouver, Canada, for analysis. The La Colorada Property laboratory and Actlabs are certified to ISO 9001:2015 standards. SGS and Bureau Veritas are accredited to ISO/IEC 17025 standards. Actlabs, SGS, and Bureau Veritas are independent of Pan American.

Samples are sorted, logged in the laboratory database, weighed, and dried in a furnace. Samples are crushed and pulverized prior to analysis. Instruments are cleaned between each sample. Analytical methods for each lab are listed as follows:

1.The La Colorada Laboratory: for gold and silver assays: fire assay with gravimetric finish; for lead, zinc, and copper assays: acid digestion with atomic absorption finish.

2. Actlabs, SGS, and Bureau Veritas: for gold assays: fire assay with gravimetric finish; for silver, lead, zinc, and copper assays: acid digestion with inductively coupled plasma (ICP) finish.

Drill core samples collected from the Skarn Project are sent to external laboratories for preparation and analysis. From early 2019, samples were sent to Actlabs in Zacatecas. Later in 2019 to 2022, samples were sent to SGS in Durango. ALS Global (ALS) is the current external laboratory for samples from the Skarn Project. Since 2022 and until now, samples have been processed by ALS in their Hermosillo facility for sample preparation and in their Vancouver, Canada, facility for analysis. Actlabs is certified to ISO 9001:2015 standards. SGS and ALS are accredited to ISO/IEC 17025:2017 standards. Actlabs, SGS, and ALS are independent of Pan American.

At all external laboratories, the samples are sorted, logged in the laboratory database, weighed, and dried in a furnace. Samples are then crushed and pulverized for analysis.

The analytical methods for samples from the Skarn Project varied with the different laboratories used over time. The analytical method used at Actlabs in 2019 for silver and multi-element analysis consisted of aqua regia digestion with a combination of concentrated hydrochloric and nitric acids to leach sulphides, some oxides, and some silicates. This method was used for the analysis of the following elements: Ag, Al, As, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, Ga, Hg, K, La, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sr, Te, Ti, Tl, U, V, Th, W, Y, Zn, and Zr.

Between 2019 and 2022, samples analyzed at SGS for silver and multi-element analysis were analyzed using aqua regia, nitric, and hydrochloric acid digestion, and inductively coupled plasma optical emission spectroscopy (ICP-OES) finish (ICP14B method code). This method was used for the analysis of: Ag, Al, As, Ba, Be, Bi, Ca, Cd, Cr, Co, Cu, Fe, Hg, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Ti, V, W, Y, Zn, Zr. Gold was determined using fire assay with an atomic absorption spectroscopy (AAS) finish (GE_FAA313 method).

In 2022 and 2023, samples sent to ALS were assayed for silver and multi-element analysis using aqua regia digestion and an inductively coupled plasma atomic emission spectroscopy (ICP-AES) finish (ME-ICP41 method). This multi-element method was used for the analysis of Ag, Al, As, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, Ga, Hg, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sr, Th, Ti, Tl, U, V, W, and Zn.

More recently, the method for silver and multi-element analysis at ALS was changed to a four-acid digestion with ICP-AES finish (ME-ICP61 method). This method analyzes for: Ag, Al, As, Ba, Be, Bi, Ca, Cd, Ce, Co, Cr, Cs, Cu, Fe, Ga, Ge, Hf, In, K, La, Li, Mg, Mn, Mo, Na, Nb, Ni, P, Pb, Rb, Re, S, Sb, Sc, Se, Sn, Sr, Ta, Te, Th, Ti, Tl, U, V, W, Y, Zn, and Zr. When silver exceeds 100 g/t, the determination is made by four acid digestion and reading by atomic absorption spectrometry (Ag-OG62), if silver exceeds 300 g/t, the sample is analyzed by fire assay and gravimetric finish. When copper, lead, or zinc exceed 10,000 ppm, the samples are analyzed by four-acid digestion and reading by atomic absorption spectrometry (Cu, Pb, Zn-OG62). Gold is determined using fire assay with an atomic absorption spectroscopy (AAS) finish (Au-AA23 method).

11.3Quality Assurance and Quality Control

Pan American implements a quality assurance and quality control (QAQC) program that includes the submission of the following types of quality control (QC) samples to the internal and external laboratories:

•Blanks to detect cross-sample contamination in the sample preparation phase.

•Certified reference materials (CRMs or standards) to evaluate analytical accuracy and bias.

•Coarse reject/preparation duplicates to evaluate the reproducibility of assays within one original sample.

Blanks are inserted to monitor potential contamination in the preparation sampling stream. The blank material is composed of gravel-size silica that is known to contain silver, gold, lead, and zinc grades that are less than the detection limit of the analytical methods.

The reference materials are composed of material from the La Colorada Property and manufactured and certified by independent laboratories. The CRMs have been prepared by SGS and Actlabs, both in Mexico. Each CRM is provided with a certificate listing the round-robin assay results and the expected standard deviation. These CRMs are individually packed in paper envelopes (100 to 120 g per envelope), inserted in plastic bags, and vacuum sealed.

Coarse reject (or preparation) duplicate samples consist of sample material that has been crushed by the laboratories (not pulverized) and returned to the sampling team. Samples for duplicate assay are selected from those returning high assays; these are then repackaged with new sample numbers and resubmitted on a monthly basis.

Assay results are reviewed regularly to ensure that appropriate and timely action is taken in the event of a failure. Any sample batch containing QAQC failures is resubmitted to another laboratory for analysis.

For samples from the La Colorada Vein Mine, Pan American inserts one quality control (QC) sample for every 6 samples submitted to the primary laboratories (the La Colorada Laboratory, SGS, Actlabs, Bureau Veritas, or ALS).

Silver assay results for blanks are presented in Figure 11-1. Results indicate that cleaning protocol between samples is effective at minimizing contamination.

Results for CRMs, tested from 2008 to 2023 for silver and gold, are presented in Figure 11-1. The results are plotted as the Z-score versus time. The Z-score is calculated as ((Measured-Expected))/Tolerance). The tolerance is the number of standard deviations used as the failure criteria. The purpose of the Z-score is to plot multiple reference materials together on one chart normalized to one common scale and to identify any overall trends in the data. The silver CRM results show a negative bias since 2019, which is considered minor but is being monitored by Pan American.

Approximately 1 sample in 20 (or 5%) is resubmitted as a coarse reject duplicate. Results comparing the original silver assays with that of their coarse reject duplicates, submitted between 2009 and 2023, are shown in Figure

11-2. For duplicate pairs with a mean grade above 50 g/t Ag, 91.9% of the pairs have a relative percentage difference (RPD) less than 20%, indicating excellent reproducibility over long periods.

When sampling the Skarn Project, Pan American inserts either one blank or one CRM for every 10 samples submitted to the primary laboratories (SGS, Actlabs, or ALS). In addition, coarse reject/preparation duplicates are selected from samples returning high assays at a monthly submission rate of 5%.

Assay results for blanks showing silver, copper, lead and zinc are presented in Figure 11-4. Results obtained indicate that the cleaning protocol between samples is effective at minimizing contamination.

Lead and zinc assay results for CRMs tested from 2018 to 2023 are presented in Figure 11-5. The results are plotted as the Z-score versus time. The CRMs results show good accuracy for all monitored analytes. The acceptance level for the reference materials is between 98.9% and 99.72%. No bias is observed for gold, copper, lead or zinc; a slight positive bias is observed for silver (with 76.5% of the results above the reference value) but is constrained within 3 standard deviations.

Approximately 1 sample in 20 (or 5% of samples) is resubmitted as a coarse reject duplicate. Results comparing the original lead assays with their coarse reject duplicates, submitted between 2019 and 2023, are shown in Figure 11-6. For duplicate pairs with a mean grade above 0.01% Pb, 92.6% of the pairs have a relative percentage difference (RPD) of < 20%, indicating excellent reproducibility. Similarly good reproducibility has been observed with zinc (91.6% of samples below 20% RPD), copper (92.2% of samples below 20% RPD), and silver (91.7% of samples below 20% RPD).

11.4Bulk Density

Spatially and geologically representative samples have been measured for bulk density using the water displacement method and the results are used for the estimation of tonnes and contained metal in the mineral resource and reserve estimates.

11.5Material Impact on the Accuracy and Reliability of Sample Data

The opinion of the qualified person responsible for this section of the technical report is that the sample preparation, analytical, and security procedures followed for the samples are sufficient and reliable for the purpose of the mineral resource and mineral reserve estimates.

12Data Verification

This section describes the information verification procedures performed by Pan American and those reviewed by the qualified persons responsible for this technical report. There were no limitations in the ability of the qualified persons to verify the data. All qualified persons have completed site visits to verify available information and discuss with on-site personnel. It is the opinion of the qualified persons that the data used for the purposes of this technical report are adequate.

12.1Mine Engineering Data Verification

The qualified person, Martin Wafforn, P.Eng., undertakes regular reviews of Pan American’s mining fleet; its mine operational and production data; grade control data including dilution and ore loss; geotechnical and hydrological studies; waste disposal requirements; environmental and community factors; processing data; development of the LOM plan including production and recovery rates, capital and operating cost estimates for the mine and processing facilities, transportation, logistics, power and water consumption and future requirements, taxation and royalties; and the parameters and assumptions used in the mineral resource and mineral reserve estimates and economic model.

In the opinion of the qualified person, the data, assumptions, and parameters used to estimate mineral resources and mineral reserves are sufficiently reliable for those purposes.

12.2Geology Data Verification

The qualified person, Christopher Emerson, FAusIMM, undertakes regular reviews, for both the La Colorada Vein Mine and the Skarn Project, of drilling plans; drilling, sampling, and QAQC results; drill core and geological interpretations; mineral resource estimation procedures including the interpretations of mineralization; and reconciliation between the mine plan and the processing plant. During site visits, the exploration drilling, sample, and security protocols are reviewed, along with the operational mine plan, actual mine operation data, and grade control protocols.

In the opinion of the qualified person, the data and parameters used to estimate mineral resources and mineral reserves are sufficiently reliable for those purposes.

12.3Mine Engineering of the Skarn Project PEA Data Verification

The qualified person, Peter Mollison, P.Eng., oversaw the Skarn Project PEA including reviewing the work conducted by external consultants regarding the mine engineering aspects of the PEA.

In the opinion of the qualified person, the data, assumptions, and parameters used to prepare the mining engineering sections of the Skarn Project PEA are sufficiently reliable for those purposes.

12.4Metallurgy Data Verification

The qualified person, Americo Delgado, P.Eng., undertakes regular reviews of Pan American’s processing plants, tailings storage facilities and dams, and operational data including metallurgical results, production, reagent consumption, treatment rates, plant availabilities and utilization, pumping capacities, pond levels, solution concentrations, metallurgical and analytical lab procedures, and general business performance. The qualified

person also oversaw the Skarn Project PEA and reviewed work conducted by external consultants regarding the surface infrastructure, metallurgy, and tailings storage aspects of the PEA.

In the opinion of the qualified person, the metallurgical testing and analytical procedures are reliable for the purposes used in this technical report. The available operating results relating to the recoverability of silver, zinc, and lead show that the processing methods used at the La Colorada Property are appropriate and adequate for the type of mineralization. In addition, the tailings management systems followed during design, construction, and operation are aligned with best practices and considered suitable for the La Colorada Vein Mine.

12.5Environment, Social, and Permitting Data Verification

The qualified person, Matthew Andrews, FAusIMM, undertakes regular reviews of Pan American’s environmental, social, and permitting factors including baseline studies, impact assessments, water studies, water treatment plants, mine closure plans and cost estimates, and related risks.

In the opinion of the qualified person, the La Colorada Property’s environmental studies, project permitting status, social and community involvement, and mine closure plans are considered adequate for this operation and for the Skarn Project PEA.

13Mineral Processing and Metallurgical Testing

13.1Introduction and Previous Work

The metallurgical assumptions used in this technical report for the mineral resource and mineral reserve estimates for deposits at the La Colorada Vein Mine are based on operational plant performance and are confirmed by bench-scale testing of samples representative of the planned monthly mine feed. This work has confirmed that the optimum processing method is selective lead/zinc sulphide flotation for sulphide ore and cyanidation for oxide ore.

The metallurgical assumptions used for the Skarn Project are based on mineral processing and metallurgical testing conducted on representative samples. The test work has confirmed the optimum processing method of lead/zinc sulphide flotation and is expected to have a very good metallurgical performance, producing high-grade lead and zinc concentrates with high metal recoveries. The mineral processing and metallurgical testing for the Skarn Project, including expected metallurgical recovery, description of the concentrates, and if material issues or deleterious elements were found, are described in Section 24.1.4.

13.2Metallurgical Recovery

In the sulphide plant, recoveries in 2023 averaged 93% for silver, 58% for gold, 86% for lead, and 84% for zinc. In the oxide plant, metallurgical recoveries in 2023 averaged 82% for silver and 43% for gold. Table 13-1 summarizes the silver, gold, zinc, and lead recoveries and throughputs achieved in the plant from 2017 to 2023.

13.3Material Issues and Deleterious Elements

All processing factors, including an allowance for deleterious elements, have been considered in the flow sheet and financial model, based on operational performance and results.

14Mineral Resource Estimates

Mineral resource estimates were carried out separately for the La Colorada Vein Mine and the Skarn Project. The La Colorada Vein Mine mineral resource consists of 64 mineralized zones, each estimated separately. Annual updates are carried out on those mineralized zones that have significant mining or additional drilling information since their previous estimate. The Skarn Project is updated when significant additional drilling information becomes available. The Skarn Project is distinct from the La Colorada Vein Mine and is estimated separately.

Both the La Colorada Vein Mine and the Skarn Project were estimated in accordance with the generally accepted standards set out in the CIM Mineral Resource and Mineral Reserves Estimation Best Practice Guidelines (November 2019) and classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves.

The combined mineral resource for the La Colorada Vein Mine and the Skarn Project is tabulated below in Table 14-1. The effective date of the mineral resource is June 30 2023 for the La Colorada Vein Mine and December 18 2023 for the Skarn Project. Mineral resources are reported exclusive of mineral reserves and mineral resources that are not mineral reserves do not have demonstrated economic viability.

For the La Colorada Vein Mine, the vein, hanging wall and footwall zones were combined into a practical mining width that includes 40 cm or 35 cm of each hanging wall and footwall for cut and fill or long-hole stoping mining methods respectively. A minimum mining width of 2.6 m was used for cut and fill and 2.2m for long-hole mining areas. The resulting diluted mining intervals were reported above a cut-off grade that varies per mineralized zone and was calculated using prices of US$19 per ounce of silver US$1,300 per ounce of gold, US$2,600 per tonne of zinc, and US$2,000 per tonne of lead. The lead and zinc grades listed for the La Colorada Vein Mine are averages for the deposit, however, the only payable base metals are those from concentrates produced from the sulphide ores, not those from the doré produced from the oxide ores.

The mineral resource estimate for the Skarn Project was reported using a Net Smelter Return (NSR) cut-off grade. The metal price assumptions used for the long term Skarn Project mineral resource statement are higher than those used for the La Colorada Vein Mine mineral reserves to reflect Pan American’s view of the long term metal prices as well as reasonable prospects for eventual extraction of the Skarn Project mineral resource. NSR values were calculated using metals prices of US$22/oz silver, US$2,800/t zinc, and US$2,200/t of lead and metallurgical recoveries of 87.4% silver, 88% lead and 93% zinc with mineral concentrates containing 67% Pb in the lead concentrate and 60% Zn in the zinc concentrate, obtained from metallurgical testing. The Skarn Project’s mineral resource estimate was reported by determining the total in-situ tonnes and metal grades constrained inside volumes that are based on a SLC mining method. To determine the constraining SLC shapes, an initial elevated cut-off value of $50/t NSR was applied. Geotechnical, geometry and caving rules were then applied to ensure that practical mining shapes and sequences were achieved. Each level, and each zone was individually tested for overall economics, and then tested as part of the caving sequence. The resulting constraining shapes were then considered as practical mining outlines. The tonnes and grades are inclusive of the must-take low-grade material within the volume. No other mining recovery, ring recovery, dilution, or mineral losses have been applied. Additional material outside the SLC shapes but within the development volumes that is above a cut-off grade of $10/t NSR was included in the mineral resource estimate.

1.Numbers may not add up due to rounding.

2.Mineral resources exclude those mineral resources that were converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

3.Mineral resources were estimated in accordance with the guidelines laid out in the CIM Mineral Resource and Mineral Reserves Estimation Best Practice Guidelines (November 2019) and classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines.

4.For the La Colorada Vein Mine, the vein, hanging wall and footwall zones were combined into a practical mining width that includes a minimum dilution of 40 cm, or 35 cm of each hanging wall and footwall for cut and fill or long-hole stoping mining methods respectively. A minimum mining width of 2.6 m was used for cut and fill and 2.2 m for long-hole mining areas.

5.For the La Colorada Vein Mine, the diluted mining interval was reported above an economic cut-off grade that was calculated using a price of US$19 per ounce of silver US$1,300 per ounce of gold, US$2,600 per tonne of zinc, and US$2,000 per tonne of lead. Economic cut-off grades used for reporting the resource vary for each vein as a function of oxidation, depth, mining method, and geotechnical and processing variables.

6.The La Colorada Vein Mine’s listed lead and zinc grades are averages for the deposit. However, the only payable base metals are those from concentrates produced from the sulphide ores, not those from the doré produced from the oxide ores.

7.The effective date for the mineral resource estimate for the La Colorada Vein Mine is June 30, 2023.

8.Prices used to report the Skarn Project mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc, and US$2,200 per tonne of lead.

9.For the Skarn Project mineral resource, an estimated NSR (in US$/t) was calculated using metallurgical recoveries, obtained from metallurgical testing, of 87.4% silver, 88% lead and 93% zinc with mineral concentrates containing 67% Pb in the lead concentrate and 60% Zn in the zinc concentrate. Estimates for transport, payability, and refining/selling costs, based on experience and long-term views of the marketing, treatment, and refining of these types of mineral concentrates, were included.

10.Reasonable prospects for eventual economic extraction were assessed for the Skarn Project by determining the total in-situ tonnes and metal grades constrained inside volumes that were based on a SLC mining method. To determine the constraining SLC shapes, an initial elevated cut-off value of $50/t NSR was applied. Geotechnical, geometry and

11.The effective date of the Skarn Project mineral resources estimate is December 18, 2023. The geological model was completed in December 2022 and results from diamond drilling conducted in 2023 are therefore not included in this estimate.

12.The mineral resource estimates for the La Colorada Vein Mine and Skarn Project were prepared under the supervision, or reviewed by Christopher Emerson, FAusIMM, who is a qualified person as that term is defined in NI 43-101.

14.1Mineral Resource Estimate of the La Colorada Vein Mine

This section describes the mineral resource estimation for the vein deposits at the La Colorada Vein Mine. These deposits include 61 mineralized veins and 3 mineralized breccias. The estimate is based on drilling and channel sampling conducted until May 31, 2023. The mineral resource has an effective date of June 30, 2023.

Mineral resource estimation for the Skarn Project, effective December 18, 2023, is outlined in Section 14.2.

14.1.1Introduction

The mineral resource for the vein deposits at the La Colorada Vein Mine was estimated using block models that contain a total of 64 mineralized zones. Annual resource updates are carried out for zones where significant additional drilling or mining has occurred since the previous update; of the 64 mineralized zones, 24 were updated in 2023.

Three-dimensional (3D) geological modelling and grade estimation has been carried out on site at the La Colorada Vein Mine using the Leapfrog Geo and Datamine Studio RM software packages. A combination of ordinary kriging (OK) and length-weighted inverse distance (LWID) methods are used to interpolate grade into the five main veins (Amolillo, NC2, HW, Recompensa and Veta 3), and a LWID interpolation method is used for the minor veins and breccia zones.

14.1.2Database

The drilling database includes all historical drilling and infill drilling data collected between 1997 (prior to PAS acquisition) and the end of May 2023. A total of 2,508 core drill holes and 217,052 underground channels were included in the 2023 models. The resource database for the 2023 models was closed for most veins on May 31, 2023. The La Colorada Geology Modelling Department was responsible for updating the drill hole and channel sampling database.

Exploration and production data were received as a set of CSV tables that included collar, survey, lithology, oxidation and assay data. The tables were imported into Leapfrog Geo and Datamine Studio RM for validation, geological modelling, and estimation. The database was validated for missing information, overlapping records, and anomalous values. Errors were corrected and the database updated. Assays below detection were set at half the detection limit prior to use in estimation.

14.1.3Geological Modelling and Domains

A total of 64 mineralized zones are defined at the La Colorada Vein Mine; 61 of these zones are mineralized veins and three are mineralized breccias. The mineralized zones are located in the extensions of the existing underground mine workings or adjacent to them. Mineralized vein structures measure between 0.20 and 3.0 m thick, strike generally NE-SW, and dip between 40 and 90 degrees. Mineralization is in the form of veins, veinlets, and breccias which contains mainly silver with minor amounts of gold, lead, and zinc.

3D geological modelling of each vein structure was carried out in Leapfrog Geo software at the mine site. Exploration drilling and channel sampling results were used to define the vein wireframes; structural observations and mapping from mine levels were incorporated in the model. Vein intersections were defined using geological logging data from drill holes and channels samples. No minimum mining width was used to model the mineralized vein shapes. Wireframes were extrapolated to a maximum of half the local drill hole spacing, measured from the last defined vein intersection. In addition to the mineralized vein wireframes, hanging wall and footwall wireframes were constructed for each vein structure by applying a 2 m offset either above (hanging wall wireframe) or below (footwall wireframe) each of the defined veins.

Three additional wireframes were constructed for the breccias based on geological logging data. No hanging wall or footwall zones were defined for the breccias.

The final mineralization and hanging wall/footwall wireframes were audited and reviewed internally prior to use in estimation. Each mineralized zone was assigned a domain code; the hanging wall and footwall zones were assigned the same domain code as the mineralized vein plus a suffix of 01 (for hanging wall) or 02 (for footwall).

The vein system is currently modelled to cover an area extending over 3,000 m along strike, 2,000 m wide and 1,000 m deep. The spatial distribution of the mineralized structures is shown in Figure 14-1.

Table 14-2 lists details for the modelled veins, their domain codes, year they were updated, average grade and proportion of the total mineral resource (for all classification categories). Recompensa, NC2, HW, Veta 3 and Amolillo are the five main vein structures and account for 37% of the total silver ounces contained in the resource model. Mining activities are focused on the five main veins and have the majority of mineral resources converted to mineral reserves. These represent the most material veins to the La Colorada Property and, as such, are highlighted in this technical report.

14.1.4Compositing and Capping

For the main veins and associated hanging wall and footwall domains, samples were not composited. Length weighted estimates were carried out to account for any potential bias that may result from estimation using samples of unequal length. Table 14-3 lists the length-weighted statistics for these veins.

For the minor veins samples were composited. Composites were created for each of the vein, hanging wall, and footwall domains using a maximum composite interval that approximated the full thickness of the domain, thus creating a single composite per domain for the vast majority of drill holes and channels. The composite length was adjusted to fit the domain and no minimum composite length was used. As for the major veins, estimates were length weighted to remove any potential bias created by using unequal composite lengths. Table 14-4 details the composite statistics for the five most sampled minor veins.

Outlier analysis was undertaken on sample or composite data for all elements within each domain. Traditionally, outliers are capped globally using the data distribution to guide an appropriate capping threshold and all data above that threshold are reset to the threshold value. This approach was not considered appropriate as, in many areas, sample grades were not sufficiently high to be above a global outlier threshold, but were significantly higher than the surrounding composite grades. Retaining these samples without capping could result in a local overestimation of the grade. For this reason a local capping approach was selected. This approach calculates the average grade in a local search ellipse with and without a composite. If including the composite causes a significant difference in the local averages, the composite is considered a local outlier and the composite grade is reduced to a value that doesn’t impact the local averages is significantly. This approach does not target only high-grade composites and, indeed, the highest-grade composites globally may not be capped if they are surrounded by composite grades of a similar magnitude. Thresholds for determining what is considered a significant difference were selected to ensure that approximately 5% of data was capped.

Table 14-5 shows the impact of local capping on the mean and coefficient of variation (calculated by dividing the standard deviation by the mean) for the five main veins. Although only the vein intersections are shown in the table, the hanging wall and footwall domain data were capped in the same way.